PART B A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a corporate bond fund, and the third is a T-bill money market fund that yields a rate of 5.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation 15% 32% Stock fund (S) Bond fund (B) 9 23 The correlation between the fund returns is 0.15 Required: (a) Draw the investment opportunity set of the two risky funds. Use investment proportions for the stock fund of 0% to 100% in increments of 10%. What expected return and standard deviation does your graph show for the minimum-variance portfolio? (b) What does your graph show for the expected return and standard deviation of the optimal risky portfolio? (c) Suppose your portfolio must yield an expected return of 12% and be efficient. (i) what is the standard deviation of your portfolio? (ii) What is the proportion invested in the T-bill fund and each of the two risky funds